The satellite industry is no stranger to consolidation. There have been periods of consolidation throughout its history, but the market for M&A has truly heated up recently with some very big names making some very bold moves. SES’s acquisition of Intelsat to create a stronger multi-orbit satellite operator was completed last year followed by a slew of others including Amazon and Globalstar, Rocket Lab and Iridium, and Lynk and Omnispace.
What’s going on behind the scenes of the satellite market that has given rise to such change and how will it affect smaller players going forward?
We know that the industry is going to through a dramatic period of change and that this has destabilised the traditional GEO satellite industry leaving it in state of flux. It is however, finding its way to a new future with small, modular and flexible payloads, a move away from the very large monolithic satellites of the past to a much smaller version that is easier and faster to build.
Full Stack Approach – Not always better
The market has been well and truly spooked by the vertically integrated capabilities of SpaceX. There’s been a distinct move towards doing everything in-house and this has spurred the coming together of manufacturers, connectivity providers and launch service providers. Bringing it all in house means ultimate control over end product and service. However, it also creates barriers where cross collaboration could otherwise be very useful and serve to strengthen the industry. Though it’s true that the benefits of a vertically integrated business are many, it does impact the potential for innovation from start-ups and emerging and forward-thinking companies that we see appearing on a regular basis within the industry. It’s these small, agile companies that bring fresh ideas to more established players. Operators and other satellite companies that may have been in the business for decades are partnering with new space start-ups which enables them to adopt innovation that is rooted in software, to integrate multi-orbit capabilities and new manufacturing processes – and fresh mindsets. This collaboration across the sector is critical, and vertical integration can stifle that conversation. So yes, vertical integration holds benefits when it comes to supply chain, bottlenecks and overall control, but it also can work against the industry finding new and innovative ways to work together to promote that collaboration that benefits us all.
D2D
The other main driver behind consolidation in the industry is the Direct to Device market, which allows standard smartphones to connect to satellites with no reliance on cellular base stations. This sector is set to skyrocket, and satellite operators are positioning themselves to ensure that they can get a piece of the action and combat so-called ‘dead zones’. According to Fortune Business Insights, the market was valued at US$407.1 million in 2025 which is forecast to grow to a massive US$3261.1 million by 2034. This has triggered a shift from emergency satellite messaging to direct to device NTN connectivity as an extension of terrestrial coverage.
Spectrum tensions
Spectrum is a contentious part of growth of the sector given the fact it is in short supply. Tensions over spectrum rights have been rising and satellite operators tend to fall into two different sides of the fence when it comes to spectrum. There are those that are using spectrum licensed to mobile carriers and those relying upon harmonized MSS spectrum. M&A and other deals can help companies to acquire spectrum to enable them to pursue D2D delivery. Now that operators are racing to be the first ones to offer D2D, the demand for spectrum, already a scarce resource, is getting even hotter.
Deals Done
In February 2025, Starlink announced that it was launching D2D services in the US and New Zealand, becoming the first operator to launch services and the company placed 650 VLEO (very low earth orbit) satellites in orbit to help create the service. SpaceX also purchased Echostar’s wireless spectrum priced at US$17 billion to take its D2D offering to the next level.
When Amazon bought Globalstar, it not only gained access to its fleet of LEO satellites, but it also gained MSS spectrum licenses and D2D capabilities. In addition, its partnership with Apple will help MNOs to extend voice and data services to Globalstar’s existing emergency text services.
SES’s recent merger with Intelsat supports the combined entity’s targeting of the D2D industry by bringing together its multi-orbit capability, routing traffic through SES’s existing MEO infrastructure. Both companies also have a stake in Lynk Global which will enable SES to develop LEO satellites supporting D2D capability for government and mobile network operators. SES has also recently announced that it will be supporting Elveo in accelerating delivery of its D2D services and will collaborate with it on global spectrum initiatives to enable it to deliver D2D more widely.
Rocket Lab’s recent purchase of Iridium gives the now vertically integrated company a strategic foothold in the D2D sector. Iridium already has an NTN business, Iridium NTN Direct, utilizing its narrowband satellite IoT and D2D service. Iridium also brings with it precious L-band spectrum which works globally, even in bad weather and this bolsters Rocket Lab’s bedrock for D2D services even more, especially as they are set to pursue a different set of customers with low-cost, low-power devices in industries such as agriculture and for smart networks.
Smaller players feel the squeeze
The increase of vertically integrated companies and in mega constellations is set to have an impact on the smaller industry players of which there are many. Fresh, innovative start-ups have been regularly springing up over the last few years, but huge constellations and merged companies will present financial pressures for these small entities as they try to succeed in a highly competitive market. Projects may well become harder to fund and competing against the large tech companies puts them at an extreme disadvantage. This could well see small players looking to take a place in niche markets where they are at arms-length from the connectivity being provided by the larger companies.
Future Industry Consolidation
It’s an interesting time for satellite industry watchers as the transformation of the sector continues. Consolidation is sure to play an important role going forward driven by the convergence of telco and satellite, which is sure to see tech giants scooping up operators and spectrum. The efficiency gains of vertical integration will also continue to fuel M&A activity as well as the buy-out of operators that are struggling due to the changes in the market or general overcapacity. Finally, as sovereignty becomes an ever more important consideration for regions and countries, wise mergers and acquisitions that strengthen sovereign satellite offerings from ground to space can make a lot of sense. One thing is for certain, there’s a lot more to come.